Following the work of Basu in 1997, the excess of the sensitivity of accounting earnings to negative share return over its sensitivity to positive share return (the Basu coefficient) has been interpreted as an indicator of conditional accounting conservatism. Although this interpretation is...

This study uses recent developments in the theoretical modelling of the links between unrecorded accounting goodwill, accounting profitability and the cost of equity, together with Capital Asset Pricing Model (CAPM) betas, to estimate the ex-ante equity risk premium in the UK. The results...

This paper constructs a simple setting in which economic returns always lead accounting earnings. It then uses this setting to explore analytically the likely effect of 'returns leading earnings' on the properties of the market-to-book ratio, accounting profitability, the price-earnings ratio...